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Posted by
garyeb
on 2007-11-26

PUBLIC:

After many years pitching the top funds in Silicon Valley, NYC and Boston that were overloaded with MBAs with bupkes for operating experience, it was nice to run into a firm with partners who had real operating experience, understood the need for accepting some risk in investment decisions and didn't just fall off the MBA "turnip truck" (this comment will piss off all the funds I need to speak with for my series A round...).

These guys acted intuitively within the constraints they are managing OPM, something your purely analytical "I-wanna-be-an-investment-banker", faux VCs seldom do. Yes, VCs do need to post solid IRRs to raise the next fund and, yes, they do have fiduciary responsibilities to their LPs but if you drive all risk out of a deal then the bulk of the rewards also disappear.

Anyway, Flywheel moved extraordinarily quickly to make a decision (10 minutes, if I recall correctly) and the terms were much better than typical seed deals that take immediate equity stakes. Our deal is with their Gap Fund but I don't expect things to be hugely different with our series A round when we get there (I fully expect Flywheel to participate in that round).

I rated them somewhat neutral on execution assistance for two reasons. First, the terms of engagement with the Gap Fund are that companies financed through this fund can't expect much direct assistance and also that fact that I'm a "seasoned" (older) startup exec who doesn't expect much support. That said, I do know that Flywheel does engage actively when it's appropriate or the company requests assistance. And they are quite proactive with programs to help their CEOs given the small size of the firm.

Overall, if you have a good tech deal in this region and need a modest investment, it's worth your time speaking with Flywheel. Bear in mind that there are no A+ VC funds from this entrepreneur's perspective (contrary to VC fund marketing pitches). Almost all are populated with extremely bright people who are often a bit full of themselves. The vast majority have an overall GPA in the B- to B+ range and Flywheel is solidly in this range.

Finally, Trevor did ask me to make this posting. His request had minimal impact on my comments. I might have pulled a punch or two but the net-net is unchanged. The only thing that changed is that I simply would not have taken the time had he not asked. Reasonable quid pro quo in my book given his willingness to invest in my new venture.